At the close of regular trading, Seagate were off 50 cents to $11.50. The stock trades under the ticker symbol STX.
Seagate's rough outing wasn't unexpected. On Tuesday the company's IPO priced at $12, below its initial pricing range. That pricing signaled limited interest from institutional investors.
The company was takentwo years ago, avoiding much of the turmoil that hit technology stocks.
The Scotts Valley, Calif.-based company had initially set a pricing range of $13 to $15 a share, but apparently potential buyers of the stock lacked the interest needed to meet or exceed that range. Some investors say they wereby the financial arrangements of the offering and the challenging environment of the disk-drive industry.
"When the price is set lower than the pricing range, some investors may view this as a sign of weakness," said David Menlow, president of IPO Financial Network, an IPO research and tracking firm. "I would imagine the stock will have a very reserved opening performance."
Seagate, with its target price of $12 a share, would raise $870 million. But only $288 million will go to the company. The remainder of the proceeds will largely go to Seagate's management group and the buyout firms that purchased the company a couple of years ago.
Some potential investors note that the company is fundamentally strong when compared with its competitors, but that it operates in an industry where competition is intense and profit margins are slim.